Microsoft in EU complaint against Motorola Mobility

Microsoft has announced the filing of a complaint with the European Commission over Motorola Mobility's royalty demands, relating to H.264 video. It said that Motorola Mobility is trying to block the sale of Windows PCs and laptops, as well as the firm's Xbox 360 console because they, "enable people to view videos on the Web and to connect wirelessly to the Internet using industry standards."

At the core of its complaint, Microsoft accuses Motorola Mobility of breaking promises made to other firms in the industry when it comes to patents essential to common technical standards. These standards are developed by the industry for a very important reason, so that the greatest amount of interoperability and compatibility can be achieved between products developed by different firms.

Microsoft says that the industry came together years ago to define common technical standards that every firm can use to build compatible products for video and Wi-Fi, and that each firm involved (including Motorola) committed to making patents essential to the standards available on fair and reasonable terms.

For example, a $1,000 laptop running Windows software will cost Microsoft 2 cents in royalties for the use of 2,300 patents related to the H.264 video standard. The patents were made available from a group of 29 companies that came together to offer their H.264 patents to the industry on fair, reasonable and nondiscriminatory (FRAND) terms. Microsoft does benefit from a Volume discount, but points out that no firm has to pay more than 20 cents per device.

Motorola holds 50 patents related to the H.264 standard, and Microsoft says it wants royalties of $22.50 for a $1,000 laptop. If the price of the laptop is $2,000, it says Motorola is demanding $50 even though the Windows software on both would be exactly the same, and any hardware upgrades such as a bigger HDD, faster processor or more memory have nothing to do with the H.264 video standard.

Microsoft also says that Google, as Motorola Mobility's new owner, is unwilling to change course and points out that Google has not committed to avoid seeking injunctions against other firms' products on the basis of standard essential patents, like Microsoft, Apple and Cisco have recently done.

The situation has gotten attention from the U.S. Department of Justice (DoJ) and also the European Commission.

"I can assure you that the Commission will take further action if warranted to ensure that the use of standard essential patents by all players in the sector is fully compliant with EU competition law and with the FRAND commitments given to standard setting organisations."European Commissioner for Competition, Joaquin Almunia.

"Imagine if every firm acted like Motorola," said Microsoft's Vice President & Deputy General Counsel, Corporate Standards & Antitrust Group, Dave Heiner. "Windows implements more than 60 standards, and a PC supports about 200. If every firm priced its standard essential patents like Motorola, the cost of the patents would be greater than all the other costs combined in making PCs, tablets, smartphones and other devices."

4 user comments

It's for this very reason why I've ranted in the past that people should be bludgeoned to death for playing pissy games of "you didn't tell me I couldn't". It get's so mired in double back speak that nobody can follow it. Not even the rectal rangers that wrote it! I swear it gets to the point even Psy Ops operatives want to shoot themselves, it gets so complicated.

It's situations like this that socialism (awful as it gets) makes sense at times. Use capitalism in the beginning, but then once your device or product has run it's course, it then becomes public domain. Thus rendering the patent debacle mute. That way the 1st say 25-30 years you can completely sue the shit out of anyone that even remotely makes something like your product & there's no court. It's not like you're fooling anybody.

It's a thought & like everything else, it sure as hell won't work in practice. Somebody has always got to screw with the system.

Maybe a little payback for being outbid on the Nortel patents by the "consortium" of Microsoft, Apple, RIM, Sony and others?
When corporations that big get together to outbid another, maybe consortium isn't the right word.
This is public relations fluff that your going to hear from the "consortium" more and more. Consortium good, anyone else trying to be a player in the market especially Google, bad. Dave Heiner does a pretty good job of painting Microsoft as a victim though; the mark of a truly corrupt attorney.

This message has been edited since its posting. Latest edit was made on 22 Feb 2012 @ 14:23

Originally posted by Jackal1234: it's nothing more than payback for microsoft extorting a $10 royalty from the android phone manufacturers. i don't feel bad for them at all. what did they think other companies would do?